What is PayPal Fee?
PayPal fee is the transaction fee charged by PayPal for sending or receiving money. PayPal is one of the most widely used payment processors for ecommerce sellers, freelancers, and online businesses. Domestic US transactions typically cost 3.49% + $0.49 per transaction, while international transactions are 4.99% + a fixed currency conversion fee. Understanding these fees is essential for accurate pricing and profit calculation.
How to Calculate PayPal Fees
Follow these steps to calculate PayPal fees accurately:
- Enter Charge Amount — the total amount you want to charge or receive
- Select Region — Domestic US or International (affects the fee rate)
- Enter Target Net Payout — the amount you want to receive after PayPal takes its fee
- Review Results — see the PayPal fee, your net payout, effective rate, and what to charge for your target
PayPal Fee Formulas (2026)
International Fee = Amount × 4.99% + Fixed Currency Fee
Net Payout = Amount − Fee
Effective Rate = (Fee ÷ Amount) × 100%
Required Charge = (Target Net + $0.49) ÷ (1 − Rate)
| Fee Type | Domestic US | International |
|---|---|---|
| Percentage Fee | 3.49% | 4.99% |
| Fixed Fee | $0.49 | Varies by currency |
| $100 Transaction Cost | $3.98 | $5.48 |
| You Receive ($100 sale) | $96.02 | $94.52 |
| Monthly Fee | None | None |
PayPal vs Stripe: Which is Cheaper?
For most businesses, Stripe is cheaper than PayPal. Here's the direct comparison for domestic US transactions:
| Scenario | Stripe Cost | PayPal Cost | Savings |
|---|---|---|---|
| $50 sale | $1.75 | $2.24 | $0.49 |
| $100 sale | $3.20 | $3.98 | $0.78 |
| $500 sale | $14.80 | $17.94 | $3.14 |
| $1,000 sale | $29.30 | $35.39 | $6.09 |
At 1,000 transactions per month averaging $100, Stripe saves approximately $9,360 per year.
Real-World Examples
Example 1: Receiving $95 net (Domestic)
Required Charge = ($95 + $0.49) ÷ (1 − 0.0349) = $98.94
PayPal Fee = $98.94 × 3.49% + $0.49 = $3.94
You Receive = $98.94 − $3.94 = $95.00
Example 2: $500 International Sale
PayPal Fee = $500 × 4.99% + $0.49 = $25.44
You Receive = $500 − $25.44 = $474.56
Effective Rate = 5.09%
How to Reduce PayPal Fees
- Switch to Stripe — Saves 0.59% + $0.19 per transaction on domestic US sales
- Negotiate volume discounts — High-volume sellers can contact PayPal for custom pricing
- Use micro-transaction pricing — For amounts under $10, PayPal offers 5.49% + $0.09 (better effective rate on small sales)
- Accept bank transfers — PayPal's "Send Money" to friends/family has no fees for the sender, but no buyer/seller protection either
- Consider PayPal Working Capital — Loans repaid as a percentage of sales, potentially cheaper than traditional financing
Frequently Asked Questions
What are PayPal's current merchant fees in 2026?
Domestic US: 3.49% + $0.49 per transaction. International: 4.99% + fixed currency conversion fee. Micropayments (under $10): 5.49% + $0.09. No monthly fees for standard accounts.
Does PayPal charge for refunds?
No, PayPal does not charge a fee for issuing refunds. However, you will not recover the original transaction fee when you refund customers.
Are there monthly fees for PayPal?
No monthly fees for standard PayPal business accounts. Optional add-ons like PayPal Working Capital are available for qualifying businesses.
How do I calculate what to charge for a target net amount?
Use the formula: Required Charge = (Target Net + Fixed Fee) ÷ (1 − Rate%). For example, to receive $200 net from a domestic transaction: ($200 + $0.49) ÷ (1 − 0.0349) = $207.88.
What is PayPal's effective fee rate?
PayPal's effective fee rate varies by transaction amount because the fixed $0.49 fee represents a smaller percentage as the transaction size grows. For a $10 sale: 3.49% + $0.49 = 8.39%. For a $100 sale: 3.49% + $0.49 = 3.98%. For a $1,000 sale: 3.49% + $0.49 = 3.54%.